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Re: Would the Neutral Zone have better without the 20th century charac

BillJ wrote:

horatio83 wrote:

Jonas Grumby wrote:

^ Horatio83, you just blew yourself out of the water. It is now apparent that you have not even a rudimentary understanding of financial matters.

Says the guy who thinks that companies last for centuries.

The last company I worked for was started in 1858 and shows no signs of dissolving any time soon.

This is Star Trek, huh? We have a situation with the Romulans that might lead to all out war, we have an unknown threat that is more powerful than either the Federation and the Romulans, but the one thing we can't seem to get unstuck on is 20th century business longevities? Why should we care? It's a pointless story element that doesn't go anywhere and only distracts from the story that should have been the main central point, dealing with the Romulans.

It's fitting that such an interesting idea for Star Trek is completely undermined by it's own writer, and what a fitting way to leave a show than with Shades of Gray.

__________________
On the continent of wild endeavour in the mountains of solace and solitude there stood the citadel of the time lords, the oldest and most mighty race in the universe looking down on the galaxies below sworn never to interfere only to watch.

Re: Would the Neutral Zone have better without the 20th century charac

Timo wrote:

Why would we assume Offenhouse managed his own portfolio, or more exactly, failed to arrange for its management after his death? He specifically says he needs to contact a bank on the issue, and also that he needs to contact a lawyer.

I just can't see the merit in your argument. Wealth that is well over five hundred years old still definitely exists today, having survived and thrived through various disasters. Heck, wealth from land may be thousands of years old and still producing nicely for the rightful heirs of the ancient owners. Wealth managed dynamically has no obvious mode of ceasing to exist, other than the caretaker ceasing to care.

Offenhouse might well have been right about his wealth remaining for all we know - it just doesn't make him opulent any more, as life in luxury has become trivially cheap. Or his caretakers may have ceased to care when they realized the wealth would do nobody any good any more. Or then there indeed was an unpredictable major disaster at some point that robbed Offenhouse of his wealth. But all of these things would be unexpected and unlikely in the mere three centuries he was out of the circulation, considering how stable things have been in the past few thousand years. Or ever since the 1500s, anyway.

What about the starship Enterprise interiors should give him the hint that his world has collapsed? From what he sees, the United States of America is still going strong and now controls the universe, albeit under funny names and dressing in fashion one would expect of the French. There's nothing really exotic there to suggest otherwise.

Timo Saloniemi

You cannot design a complex contract system that guarantee that somebody will manage your capital while you are out for three centuries. Why? Because you'd have to put any eventuality into the contract, you have to rely on current laws that may very well change in the future and you have to pay fairly high fees in order to make it sure that there will always be somebody who will want to manage your wealth after the former one dies/quits.
Even under decent property rights there are always ways to cheat and any of his "stewards" has a pretty high incentive to steal from a sleeping man who can not defend himself. If you have no lobby and have to rely only on the law you are already in deep shit and if you are not even around to defend yourself, well, stocks, bonds and money market products are stuff that can be stolen far easier than land.

BillJ wrote:

Why are you insisting on injecting facts into this conversation?

I already pointed out that the extremes of the distribution are irrelevant, the average matters. Basic statistics, you failed at it.
If I had time on my hand I would dig out some old empirical evolutionary economics papers or search for the data myself but I am pretty sure that the average lifespan of publicly traded companies is less than half a century.

__________________
The illegal we do immediately; the unconstitutional takes a little longer. - former US Secretary of State and unconvicted war criminal Henry Kissinger

Re: Would the Neutral Zone have better without the 20th century charac

horatio83 wrote:

I already pointed out that the extremes of the distribution are irrelevant, the average matters. Basic statistics, you failed at it.
If I had time on my hand I would dig out some old empirical evolutionary economics papers or search for the data myself but I am pretty sure that the average lifespan of publicly traded companies is less than half a century.

The company I use to work for is publicly traded and is 154 years old. Most of the major automakers are around a century old and they're publicly traded. There are a lot of publicly traded companies that are past the half century mark. Proctor & Gamble, Kroger and Fifth-Third Bank (which I worked for) are three right here in Cincinnati right off the top of my head.

So, once again, it's not out of the realm of possibility for Offenhouse to believe that a bank and law firm he used might have survived. Especially given the fact that he was kept in an informational vacuum.

Re: Would the Neutral Zone have better without the 20th century charac

You cannot design a complex contract system that guarantee that somebody will manage your capital while you are out for three centuries.

Why should you? You don't really expect to come back or anything. But you can entrust your wealth on somebody, and you can trust it is in his interests to maximize that wealth, and in the interests of the next guy to keep doing the same. The wealth would be there in some form or another. Offenhouse just feels he's capable of wrestling it (or a significant part of it) back to himself because of certain preparations he made.

Which would be pretty easy to do, really. Just put most of your original capital in a foundation, with the primary purpose of keeping your broker happy with the interests, and the secondary purpose (in small but airtight print) of dumping it all back to you when you resurrect. The portfolio would just fatten the foundation, hopefully.

Even under decent property rights there are always ways to cheat and any of his "stewards" has a pretty high incentive to steal from a sleeping man who can not defend himself.

They wouldn't steal from themselves, though. Offenhouse probably wouldn't be coming back within the lifetimes of the first half a dozen generations managing the wealth, if ever. So the wealth would be nurtured for its own sake, with some of it placed in suitable foundations or whatever while the rest would be for the caretakers to enjoy.

Come on, your argument that wealth evaporates by itself is a non-starter. The corollary that Offenhouse would be mentally deficient because he fails to believe in this is nonsensical. The idea that he shouldn't contact his bank right after getting off the coffin is odd to the extreme. If the guy believes there is life after death if you pay enough, and is dead right on that, why should you fail to respect his other conviction about being able to arrange for financial security of some sort?

Re: Would the Neutral Zone have better without the 20th century charac

horatio83 wrote:

I like the episode very much and merely pointed out the utter incompetence of this "business man".

So the smart thing would be to step into that cryogenic capsule with zero financial plans set up, because those plans won't work and future people will take care of you anyway. This is what you would do.

Re: Would the Neutral Zone have better without the 20th century charac

Ghrakh wrote:

horatio83 wrote:

I like the episode very much and merely pointed out the utter incompetence of this "business man".

So the smart thing would be to step into that cryogenic capsule with zero financial plans set up, because those plans won't work and future people will take care of you anyway. This is what you would do.

Yep. His capital did not accidentally not last for three centuries so he should have given it to his family or spent it.
You tell me how to invest in 1712, step into a time machine and reclaim your capital in 2012 and I will gladly change my mind. I am not much of a student of history but I am not aware of any Western country which has not gone through some significant political shifts since then.

I understand why you believe that the good-will of others is less likely than capital lasting for three hundred years though. People in general and for historical reasons Americans even more so like to imagine that they are independent individuals who do not have to rely on anyybody or anything. It hurts to realize that one depends on others and on the specific social system one lives in.
So who is more naive, the guy who thinks that the people who unfreeze him will not be cruel to him or the guy who thinks that people will protect his property while he is absent for three hundred years?

Timo wrote:

You cannot design a complex contract system that guarantee that somebody will manage your capital while you are out for three centuries.

Why should you? You don't really expect to come back or anything. But you can entrust your wealth on somebody, and you can trust it is in his interests to maximize that wealth, and in the interests of the next guy to keep doing the same.

You ever created automatized (you are not around to screen applicants and hire) labour contracts which will guarantee that a job is done for three hundred years while you are not around and furthermore contain complicated incentive wage patterns which make the manager increase your wealth? Who sues the manager if he violates the contract?
This is ludicrous even if you assume totally unrealistically that no laws will change and no major political upheaval will occur during three centuries.

__________________
The illegal we do immediately; the unconstitutional takes a little longer. - former US Secretary of State and unconvicted war criminal Henry Kissinger

Re: Would the Neutral Zone have better without the 20th century charac

horatio83 wrote:

Yep. His capital did not accidentally not last for three centuries so he should have given it to his family or spent it..

Just to be absolutely clear, this is 100% what you would do? A simple yes or no will suffice.

horatio83 wrote:

I understand why you believe that the good-will of others is less likely than capital lasting for three hundred years though.

Never said that.

horatio83 wrote:

People in general and for historical reasons Americans even more so like to imagine that they are independent individuals who do not have to rely on anyybody or anything. It hurts to realize that one depends on others and on the specific social system one lives in.

Yeah, like Offenhouse relying on his lawyers and money...

horatio83 wrote:

So who is more naive, the guy who thinks that the people who unfreeze him will not be cruel to him or the guy who thinks that people will protect his property while he is absent for three hundred years?

Re: Would the Neutral Zone have better without the 20th century charac

horatio83 wrote:

By the way, good luck getting your deposits back when a bank goes bankrupt.

BillJ wrote:

FDIC...

Here in America, we have a little something called the FDIC (Federal Deposit Insurance Corporation), which guarantees deposits up to $250,000 per depositor per bank. So if you have $10 million, spread between forty banks, and all forty banks fail, you are covered for all $10 million. You get every penny.

Your country has the same thing, right?

the guy also held shares and bonds and believes that they they are still worth something just like he believes that the company of his lawyer still exists.

Foreign & Colonial Investment Trust was founded in 1868 (144 years), it is a Investment management company, that means that they manage their investors portfolios. Some of the portfolios go back to the founding of the company (under a different name) and are multi-generational.

Any stocks or bonds you hold become worthless once the company ceases to exist.

Not always, if the company still possesses assets, the stockholders (first), and the bondholders (second), would be able to get part or all of their instrument's value.

just look at the stocks which a random stock market index contained in 1900 and which of these companies still exist after just one century.

Let's assume a well diversified portfolio, shall we. Further, let's assume that Ralph set up a financial trust with himself as the beneficiary.

From 1900 through 2011, average total return per year of the DJIA (Dow Jones Industrial Average) was approximately 9.4%. That's 4.8% in price appreciation and 4.6% in dividends. Below is the stock market from 1900 to the present.

Re: Would the Neutral Zone have better without the 20th century charac

Trannie~sylvania wrote:

Let's assume a well diversified portfolio, shall we. Further, let's assume that Ralph set up a financial trust with himself as the beneficiary.

The naivety of some people always surprises me. The law alone does not protect your property (unless it is something like land) while you are away for centuries, you need to be around to lobby for your interests. Furthermore the law changes and there are major political upheavals over the course of centuries. Take your own country, it has been a bunch of British colonies in 1712.

From 1900 through 2011, average total return per year of the DJIA (Dow Jones Industrial Average) was approximately 9.4%. That's 4.8% in price appreciation and 4.6% in dividends. Below is the stock market from 1900 to the present.

About your picture, a log-lin depiction is easier on the eye and more informative when you deal with exponential growth.
I am well aware that long-run gross (not taking into account inflation and capital taxes) return on stocks is around 8%. (On a sidenote, bonds can very well beat stocks in the medium-run when there is a stock market crash so only put money in stocks when you are sure that you won't need it before retirement.)
But you are obviously not aware that the weights and companies of a stock market index are not fixed but changed from time to time, i.e. it does not reflect the constant birth and death of companies. Strange that I gotta go all Schumpeterian here, I always thought you guys on the other side of the big pond are better aware of the dynamic-creative-destructive aspects of capitalism than we "Old Europeans".

__________________
The illegal we do immediately; the unconstitutional takes a little longer. - former US Secretary of State and unconvicted war criminal Henry Kissinger

Re: Would the Neutral Zone have better without the 20th century charac

I don't think the intention of the writers was to make him look incompetant, just greedy, which is why he's there: To compare and contrast our society now and in the future. Here's a guy who so fervently believes in the power of capitalism, that he thinks that it's stil going strong 300 years later. He would probably be correct in his assumption if captalism was stil strong and if he had a good portfolio.